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The Problem With Modern Monetary Theory

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Modern monetary theory has been…

Market Sentiment At Its Lowest In 10 Months

Market Sentiment At Its Lowest In 10 Months

Stocks sold off last week…

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Another Perspective on Today's Strong Housing Numbers

Following today's better than expected housing numbers (See Housing Starts and Permits Surge Most in Seven Years) Doug Short at Advisor Perspectives pinged me with these comments.

Mish - I started tracking these for the first time today - complete historical data. These are two of the noisiest series of all time.

Take a look at the charts, especially the population-adjusted versions. You'll see why you need at least a 3-month moving average to get an idea of the real trend direction and slope. And check out where the latest data points put us relative to the total series.

Starts: New Residential Housing Starts Surge in April
Permits: New Residential Building Permits Rise 10.1% in April

Bottom line: take the April data with a grain of salt ... maybe a tablespoon full.


Privately Owned Housing Starts

New Privately Owned Housing Units Started
Larger Image


Housing Starts as Percent of Population

Housing Starts as a Percent of the Population
Larger Image - above from Doug Short

Here is a chart and comment I posted yesterday in Home Builders Optimistic Despite Decline in Traffic; Housing Market Index Declines.


NAHB Housing Market Index

Housing Market Index through April 2015)

If you ask the builders, sales conditions are very good with a score of 59. Sales expectations rose to an excellent score of 64. Meanwhile, actual lookers score a very poor 39.

Average it all together and you get the totally useless chart above.


Housing Market Index Components

Yesterday afternoon I asked the NAHB for the subcomponent data. Here is a chart I put together today from that data.

NAHB HMI

Note the actual traffic of prospective buyers vs. sales expectations six months out.

 

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